AP Images / Nati Harnik
Charlie Munger tore into day traders and venture capitalists, underlined that investing is tougher today than in the past, and warned truly great opportunities are incredibly rare during his first long-form podcast interview with Acquired, released several weeks ago.
Warren Buffett's business partner and Berkshire Hathaway's vice-chairman discussed everything from Heinz and Hermès to quant funds, self-insurance, evolution, and his upcoming 100th birthday party.
The living legend also touched on Buffett's fear of the retail sector, deep concern for his shareholders, and inspired Japan bet.
1. "Are the dog tracks and race tracks and the casinos good for America? Of course not!"
2. "They don't really know anything about the companies, they just gamble on them going up and down in price. If I were running the world, I would have a tax on short-term gains with no offset for losses, and I would just drive this whole crowd of people out of business." (Munger was speaking about day traders and speculators.)
3. "The low-hanging fruit for the idiot – it's not gone but it's very small." (He was saying that investing is harder today than in the past.)
4. "You don't want to make money by screwing your investors, and that's what a lot of venture capitalists do."
5. "The only way they make these big returns is to have this huge leverage that would make you crazy if you were already rich." (Munger was discussing quantitative-trading firms like Renaissance Technologies.)
6. "If you're Warren, you want to be the house, not the punter."
7. "When you know you have an edge, you should bet heavily. They don't teach most people that in business school. It's insane. Of course you've got to bet heavily on your best bets."
8. "There are maybe five, six times in a lifetime when you know you're right, you know you have one that's really going to work wonderfully, and you get a chance to do it. People who do it two or three times early, they all go broke because they think it's easy. In fact it's very hard and rare."
9. "Almost everybody that has an unusually good result has three things: They're very intelligent, they worked very hard, and they were very lucky. It takes all three to get them on this list of the super successful. How can you arrange to have two or three episodes of good luck? The answer is you can start early and keep trying a long time, and maybe you'll get one or two."
10. "You only have to get rich once. You don't have to climb this mountain four times, you just have to do it once."
11. "Warren doesn't like retailing. He's afraid of retail, practically everything that was once mighty in retail is gone. Sears Roebuck is gone, the big department stores are gone. It's just too damn difficult as far as he's concerned."
12. "Warren still cares more about the safety of his Berkshire shareholders than he cares about anything else. If we used a little bit more leverage throughout, we'd have three times as much now, and it wouldn't have been that much more risk either. We never wanted to give the least chance of us screwing up our basic shareholder position."
13. "If you're as smart as Warren Buffett, maybe two, three times a century, you get an idea like that. It was like having God just opening a chest and just pouring money into it. It was awfully easy money."
14. "There are a lot of great companies. Hermès is a great company. In its heyday, General Motors was a great company — it just gradually went to hell one contract at a time."
15. "I think your chances of buying one of them are so low, I wouldn't even look. I only believe in looking for things that I might find." (Munger was underscoring how rare it is to get a chance to invest early and at an attractive price in a truly great company.)
16. "There's something about the flavor of ketchup on a goddamn fried potato that people are really willing to change brands over. They want Heinz, so we could raise the price of Heinz. But you try and raise the price of Kraft cheese, everybody goes in rebellion, including the final customer — they don't care that much about whether the cheese is Kraft or not."
17. "I'd rather just operate with my own money. That is a much better way of doing it than to be forced to sell, or to deal with investment bankers, investment consultants, venture capitalists. The hell with them — you don't need other people. The point of getting rich is you don't have to get along with other people."
18. "Think of all the crumbums of the world that drink too much and then file big claims to the insurance company when their place gets on fire or something. Why would you want to pay your share of their stupidity?" (Munger was advocating for the wealthy to self-insure and avoid covering the costs of others' claims.)
19. "I don't give advice to just any young people — I give it to some, I pick my spots. I don't want to be more of a guru to the young people than I already am. There's all this bullshit and craziness, of course it's going to be hard out there."
20. "Lookit, biology produces a very advanced creature like us, who can sit around and talk intelligently on all these subjects. But it does it by killing everybody off in brutal competition for hundreds of thousands of years. The system that nature uses to get smart is kind of unpleasant to the people who are losing."
21. "Marriage is not as hard as it looks. Half of the marriages in America work pretty damn well, and would have worked just as well if both people had to marry somebody else, by the way."
22. "I'm going to party. I've totally maxed out the room, I can't squeeze another person in." (Munger was discussing his plans to celebrate turning 100 on January 1.)
This story was original published on November 3, 2023
